PUBLIC CONSULTATION ON LIMITATION PERIODS FOR COMPENSATION CLAIMS OF VICTIMS OF CROSS-BORDER ROAD TRAFFIC ACCIDENTS IN THE EUROPEAN UNION 1. INTRODUCTION For more than 10 years the European Union has developed its multidimensional policy towards victims. The Communication of the Commission "Strengthening victims' rights in the EU", adopted on 18 May 2011 1, announced actions to ensure that victims in Europe receive recognition and respectful treatment, protection, support, access to justice and restoration. Looking to the future for the next phase of action on victims rights, the Communication set out the Commission's intention to address the question of limitation periods for cross-border traffic accidents. This public consultation is a follow-up to the Communication "Strengthening victims' rights in the EU" concentrating on the situation of the victims of traffic accidents abroad (cross-border traffic accidents). Every year Europeans make 1.4 billion journeys abroad, of which 90% are within the European Union. A large number of these are by road transport means. Every year more than 1 million road traffic accidents occur in the European Union, causing over 1,4 million personal injuries. 2 Although cross-border road traffic accidents represent a small percentage of road traffic accidents in the EU27 3, the fact that the accident happened in a Member State other than that of the habitual residence of the victim should not impede victims rights. One problem with the current situation is that victims of cross-border road traffic accidents ('accident-abroad victims') often face difficulties with respect to the time-limits for claiming compensation. 4 The applicable time-limits for bringing a claim are determined by the law of the Member State where the accident occurred, in accordance with the Union conflict of law rules 5. The national rules on time-limits are not only complex but also vary considerably 1 COM(2011) 274 final 2 The Communication "Strengthening victims' rights", with reference to Eurostat, Statistics in Focus 94/2009; Eurobarometer 337/2010 and European Commission, CARE database. 3 See "Compensation of victims of cross-border road traffic accidents in the EU: Assessment of selected options", study by the EP, March 2007, p. 1 and p 15. The cross border factor makes it difficult to assess the exact number of accidents involving "accident-abroad victims" of road traffic accidents. Moreover, the collection of statistical data of this kind is not centralised at national or at Union level. (with reference to SEC(2005)1777, 19.12.2005). The available data are related to Germany, where in 2004 9,200 out of 450,000 road traffic accidents involved foreigners with habitual residence outside Germany. This makes up to 2% of road traffic accidents involving a cross-border dimension. 4 This was discussed also at the meeting between Vice-President Viviane Reding and the leaders of European insurance companies on 21 September 2011. 5 The issue of law applicable to rules of prescription and limitation related to the non-contractual obligations was clarified in Regulation (EC) No 864/2007 of the European Parliament and of the Council on the law applicable to non-contractual obligations (Rome II) that was adopted in 2007 and 1
throughout the EU. 'Accident-abroad victims' will often not be familiar with the rules of the country they are travelling in. This creates obstacles for asserting claims for damages. Where the time-limits for bringing a legal action for damages are particularly short in a given Member State, victims may even end up receiving no compensation at all. The divergences in the laws of compensation of victims of cross-border traffic accidents have already been noted in a study launched by the Commission in 2008 which also developed certain policy options for improving the situation 6. On the basis of this study, a consultation was carried out by the Commission in early 2009. In the light of the Communication "Strengthening victims' rights in the EU", the scale of the problem, and the potential solutions should be re-assessed. To this end the Commission's Directorate-General Justice is launching this public consultation to which all interested parties are invited to contribute. 2. PRACTICAL DIMENSION OF THE PROBLEM Divergent national legislation on limitation periods creates a potential risk of losing the right to claim compensation for the victims of cross-border road traffic accidents. In order to design appropriate and proportionate measures that could remedy this situation, it is necessary to verify the real and practical impact that this legal issue has on victims. Experiences of professionals, like lawyers or insurers are equally important as stories of citizens that faced or learned about such situations. The Commission is therefore seeking a better understanding of the factual scale of the problems encountered. Question 1: Have you experienced not receiving any compensation for damage suffered due to the expiry of time-limits for bringing a claim or are you aware of such a situation which affected a victim of a cross-border traffic accident? Please provide details of such case or cases. Question 2: Would the position have been different if the accident had not happened abroad? If yes, please explain why. 3. POSSIBLE REMEDIES TO THE PROBLEM RELATED TO TIME-LIMITS FOR 'ACCIDENT-ABROAD VICTIMS' All national legal systems in the European Union endorse the principle that contractual and non-contractual obligations have to be asserted within a certain period of time. In their detail, however, the national laws of limitation and prescription periods differ considerably throughout the EU. The rules of prescription and limitation are indeed covered by the Member States' legislation and have not been harmonised at EU level. Differences relate first to the conceptual approach to the issue. While on the Continent, the "prescription of claims" entered into application on 11 January 2009. Article 15 provides explicitly that the law applicable to non-contractual obligations, such as compensation of damages caused by a traffic accident, governs in particular the manner in which an obligation may be extinguished and rules of prescription and limitation. 6 Demolin, Brulard, Barthelemy Hoche: Compensation of victims of cross-border road traffic accidents in the EU: comparison of national practices, analysis of problems and evaluation of options for improving the position of cross-border victims, January 2009, final report available at http://ec.europa.eu/internal_market/insurance/motor_en.htm#20051222 2
operates to extinguish the claim itself, the "limitation of actions" in the Common law countries leaves the right intact and merely bars the action. More importantly, national legislation differs considerably with regard to the moment when time starts to run, the date of the relevant knowledge, the ability to interrupt or stop the running of time, the presentation of evidence and the assertion of the defence that the claim is extinguished or time-barred. The differences in national legal systems were analysed in detail in the above-mentioned study on the compensation of traffic accident victims in the EU. As explained above, the law applicable to limitation periods for non-contractual obligations 7 is the law applicable to the obligation itself. For traffic accidents, this means in practice that the time-limits for bringing a claim are determined by the law of the country where the accident occurred. This rule has increased legal certainty given that it was previously controversial whether the relevant limitation period would be determined by the law of the forum or by the law applicable to the substance of the dispute. However, the different substantive laws of limitation and prescription periods in different Member States may give rise to undesirable consequences for the victims of accidents in cross-border litigation and place obstacles in the way of injured individuals trying to assert their rights in a Member State other than their own. 'Accident-abroad victims' may even end up receiving no compensation at all due to particularly short limitation or prescription periods in the Member State where the accident occurred. The problems created by the divergence of national limitation and prescription periods for victims of cross-border road traffic accidents were highlighted in an own-initiative report of the European Parliament which asked the Commission to identify possible options to address the issue 8. In a broader context, the European Union Agency for Fundamental Rights emphasised in its recent report that disproportionately short periods of limitation or prescription constitute an obstacle to accessing justice in the Member States which may contravene the right to a fair trial enshrined in Article 6 of the European Convention of Human Rights 9. The following options are presented to address the issue of time-limits for 'accident-abroad victims': Option 1: Improving information to 'accident-abroad victims' in concrete cases - optional The first possible remedy relates to the improvement of the information to victims about the time-limits to make the compensation claim in each Member State. An option would be to encourage insurance companies 10 to make such information available on a voluntary basis. Option 2: Improving information to 'accident-abroad victims' in concrete cases mandatory 7 See Articles 4 and 15 of Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) 8 Limitation periods in cross-border disputes involving personal injuries and fatal accidents, EP resolution 2006/2014(INI) of 1 February 2007. 9 Access to justice in Europe: an overview of challenges and opportunities, European Union Agency for Fundamental Rights, 2011, p. 38. 10 This could be the liable party's third party insurer or victim's own insurer. 3
Another option would be to oblige insurance companies to make information about the applicable limitation and prescription periods available to the victim in case of a cross-border accident. This would not necessarily replace the need of the victim to seek professional legal advice but prevent the victim from seeking such advice too late to suspend or interrupt the relevant period in the country of the accident. Option 3: Improving general information on limitation and prescription periods Besides case-specific information, there could be more general information easily available on the national prescription and limitation rules for compensation claims on damages caused by traffic accidents. The Commission could draw up country fiches describing the national limitation period system for each Member State and publish them on the website on the e- Justice Portal in all Union languages. Option 4: New rules harmonising limitation and prescription periods for cross-border traffic accidents One option would consist of harmonisation of national laws of limitation and prescription periods for cross-border traffic accidents at EU level. Such harmonisation could be partial, e.g. addressing only the reasons for suspending or interrupting the running of time or full in the sense that all relevant aspects (period, commencement, grounds for suspension/interruption) would be harmonised. The scope of the harmonisation could be limited to personal injury claims for cross-border traffic accidents or extend to any delictual claim arising in a cross-border context. 11 Given that limitation periods are generally established for broader categories of claims in national legal systems, this option would interfere more than the other options with the integrity of national legal systems, thereby increasing the risk of more complexity. Question 3: Do you think that the options presented above would be appropriate to address the problems outlined and, if so, why? Do you have an order of preference concerning these options and, if so, why? Question 4: As regards Option 1, who should be responsible for providing the relevant information to the 'accident-abroad victim', the' accident-abroad victim's' own insurer or the liable party's third party liability insurer? What is the best form of provision of such information? Question 5: Do you think that improving general information on the national rules on limitation and prescription periods for claims on compensation for damages in cross-border traffic accidents would be useful? Question 6: As regards Option 4, which aspects of the law of limitation or prescription periods should a European instrument cover: the length of the limitation period, the commencement and expiration of the period, the grounds of suspension or interruption of the period, rules on computation of time or all of the above? 11 The question of consistency with the approach taken in other Union legislation, like in the Product Liability Directive would also need to be considered. 4
Question 7: Do you think there are other alternative actions that could be taken to improve the situation of accident-abroad victims by ensuring the rightful compensation for damages caused by traffic accidents? Should such actions be taken by the Member States or by the Union? 4. TWO LEGAL REGIMES FOR CLAIMS ARISING FROM CROSS-BORDER ROAD TRAFFIC ACCIDENTS A further issue of concern for victims is the absence of fully uniform rules determining the law applicable to cross-border traffic accidents in the European Union. Union law 12 allows the Member States parties to the 1971 Hague Convention on the law applicable to traffic accidents 13, the rules of which diverge from the Union law, to continue to apply that instrument. Consequently, the question whether and how much compensation a victim receives will depend in certain circumstances on the Member State of the court seised which can lead to unwarranted surprises for victims. This is particularly relevant if compensation for non-pecuniary loss is claimed since national law still differs greatly in this area. While both Union law and the 1971 Hague Convention contain the same general rule for determining the applicable law the law of the country where the accident occurred they diverge when it comes to the exceptions to the general rule. In this respect, Union law provides that where both the person claimed to be liable and the victim have their habitual residence in the same country, the law of that country shall apply. By contrast, the 1971 Hague Convention, in specific cases 14 provides for the application of the law of the country of registration of the vehicle or vehicles involved. Where several vehicles are involved in the accident, the law of the state of registration only applies if all vehicles are registered in the same country. Union law and the 1971 Hague Convention also diverge when it comes to party autonomy: Union law allows the parties to an accident to choose the applicable law whereas the Convention does not have a comparable provision. As a result, the law applicable to claims arising out of the traffic accident will in certain cases differ depending on the court seised of the case. This is notably relevant for the quite common situation where an injured passenger brings an action against the driver or owner of the vehicle illustrated by the following example 15 : an accident in Germany involves as the only vehicle a rental car registered in Belgium. All passengers, including the driver, have their habitual residence in Spain. If the victims decide to bring the case in Spain, which is party to the 1971 Hague Convention, their claims against the driver will be governed by Belgian law as the law of the country where the vehicle involved is registered. Conversely, if the case is brought to court in Germany, Union law would lead to the application of Spanish law to the 12 See Article 28 of Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II). 13 Austria, Belgium, the Czech Republic, France, Latvia, Lithuania, Luxembourg, the Netherlands, Poland, Slovakia, Slovenia and Spain. 14 See Article 4 of the Convention. 15 Inspired by the facts of the case in French Cour de Cassation crim. 6 May 1981, RCDIP 1981, 679; for further examples see Kadner Graziano, The Rome II Regulation and the Hague Conventions on Traffic Accidents and Product Liability Interaction, conflicts and future perspectives, NiPR 2008, p 425 ss. 5
claims of the victims since both the victims and the driver claimed to be liable have their habitual residence in Spain. The law to be applied (i.e. in the example the Belgian law or the Spanish law) would also cover the rules of prescription or limitation, which would thus also differ. Given that the law on compensation for damages differs considerably within the EU, the question which law applies to a claim resulting from a cross-border traffic accident may have significant impact on the outcome of a case. This situation leads to forum-shopping and can entail unwarranted surprises for victims who have initiated legal action without having obtained extensive (and expensive) legal advice weighing the advantages and disadvantages of one or the other applicable law regime. It also makes the out-of-court settlement of a claim more complicated because beforehand it is not clear what the victim would be entitled to receive in the absence of an amicable solution. 16 It should be considered whether and how to address this situation for 'accident-abroad victims' caused by two legal regimes for claims arising from cross-border traffic accidents. 17 An option would consist of fully coordinating the scope of the 1971 Hague Convention and Union law by providing that Union law should take priority where all parties to the accident are domiciled within the EU. This would allow uniform applicable law rules to apply within the EU for the majority of cases which do not involve parties from third countries. Alternatively, initiating a revision of the 1971 Hague Convention in the framework of the Hague Conference on Private International Law could be considered with a view to making that instrument acceptable to all Member States. Question 8: In your view, does the fact that the law applicable to claims arising out of the traffic accident will in certain cases differ depending on the court seised of the case create problems for victims? Have you experienced this or are you aware of a concrete situation in which this would have been problematic for victims? If so, what is the appropriate solution to address the shortcomings of the current situation? 16 However, 'accident-abroad victims' may be able to use an efficient mechanism for the quick settlement of their claims by contacting in their own language the claims representative of the liable party's insurer or the compensation body in their own Member State. 17 See Article 30 (1) (ii) of Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) that refers specifically to studying the effects of Article 28 of the Regulation with respect to the 1971 Hague Convention. The information gained through this public consultation will feed in to the application report as one of the sources for assessment. 6